Vodafone-T-Mobile deal could start mobile consolidation spree

Reports that Vodafone , the world's largest mobile network operator, is in talks to take...

Reports that Vodafone, the world's largest mobile network operator, is in talks to take over rival T-Mobile's UK operations could herald the start of a global consolidation of mobile network operators.

The UK's five mobile network operators are under pressure to provide a minimum 2Mbps broadband connection across the country under the Digital Britain policy.

But the European Commission is squeezing them to reduce tariffs for roaming and for data calls, narrowing their margins just as it calls for greater investment in network infrastructure.

If successful, the T-Mobile deal could give Vodafone about 40% of the UK mobile market by revenue, but it could unglue a network infrastructure sharing deal it signed in March with current market leader O2.

Reports in today's Financial Times suggest Vodafone would pay Deutsche Telekom €3bn to €4bn for T-Mobile UK's assets. But the deal could run foul of regulators.

Vodafone declined to comment on the report, or to say what effect it could have on its network sharing deal with O2, whose first site went live yesterday.

The Vodafone equipment, which was installed in an existing O2 site, will improve network coverage on a busy section of the M4 motorway, and will also allow for a neighbouring site to be removed soon.

Vodafone said in a statement the whole process from planning to implementation completed in 11 weeks compared to the usual nine months for a typical standalone site.

"This is the first of many shared sites that will be delivered over the coming months. Plans for other sites are now well advanced and progressing well," it said.

In February, Vodafone and Hutchison Whampoa, the Hong Kong conglomerate that owns the 3 network in the UK, said it would combine its Australian mobile businesses.

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